DoD's $18.2M contract for Jams/Jellies/Syrups awarded to J.M. Smucker Company raises competition concerns

Contract Overview

Contract Amount: $18,233,903 ($18.2M)

Contractor: THE J. M. Smucker Company

Awarding Agency: Department of Defense

Start Date: 2011-01-01

End Date: 2011-03-31

Contract Duration: 89 days

Daily Burn Rate: $204.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: RESALE - JAM/JELLY/SYRUP

Place of Performance

Location: ORRVILLE, WAYNE County, OHIO, 44667

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $18.2 million to THE J. M. SMUCKER COMPANY for work described as: RESALE - JAM/JELLY/SYRUP Key points: 1. Significant spending on food staples for commissaries. 2. Sole-source award limits price discovery and potential savings. 3. High reliance on a single large supplier may indicate market concentration. 4. Contract duration is relatively short, suggesting potential for future competitive re-evaluation.

Value Assessment

Rating: questionable

The contract value of $18.2M for a 3-month period is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to market rates for similar food products.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not available for competition, indicating a sole-source award. This method bypasses competitive bidding, potentially leading to higher prices and reduced taxpayer value.

Taxpayer Impact: The lack of competition likely resulted in a higher cost to taxpayers than if the contract had been competitively bid.

Public Impact

Commissary shoppers may face higher prices due to lack of competition. Taxpayer funds are potentially being spent inefficiently on essential food items. Dependence on a single supplier could impact supply chain resilience.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for price inflation

Positive Signals

Essential goods provided
Established supplier relationship

Sector Analysis

This contract falls under the food and beverage sector, specifically processed goods for military commissaries. Spending benchmarks for such items vary widely based on product type and volume, but competitive procurement is standard for maximizing value.

Small Business Impact

The award to The J. M. Smucker Company, a large corporation, suggests no direct benefit or opportunity for small businesses in this specific contract.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and prevent potential abuse. The Defense Commissary Agency should have internal controls to justify the sole-source decision and monitor contract performance.

Related Government Programs

Soybean Processing
Department of Defense Contracting
Defense Commissary Agency Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing.
Lack of transparency in price discovery.
No small business participation.
Short contract duration may indicate interim solution or upcoming re-evaluation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.2 million to THE J. M. SMUCKER COMPANY. RESALE - JAM/JELLY/SYRUP

Who is the contractor on this award?

The obligated recipient is THE J. M. SMUCKER COMPANY.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Commissary Agency).

What is the total obligated amount?

The obligated amount is $18.2 million.

What is the period of performance?

Start: 2011-01-01. End: 2011-03-31.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award is critical. Typically, it requires demonstrating that only one responsible source can provide the supplies or services, or that a compelling urgency necessitates limiting competition. Without this justification, the award raises significant concerns about adherence to procurement regulations and potential waste of taxpayer funds.

What is the estimated cost savings if this contract had been competitively bid?

Estimating cost savings without a competitive bidding process is challenging. However, historical data and industry analysis often show that competitive procurements can yield savings ranging from 10% to 30% or more compared to sole-source awards, depending on the market and product. This suggests potential millions in savings for this $18.2M contract.

How does the pricing compare to commercially available products of similar quality and quantity?

A direct comparison to commercially available products is difficult without specific product details and quantities. However, the absence of competition inherently removes the downward price pressure typically exerted by multiple bidders. The J. M. Smucker Company, as a major food producer, likely has established pricing structures, but a sole-source award prevents verification against a competitive market.

Industry Classification

NAICS: Manufacturing › Grain and Oilseed Milling › Soybean Processing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE STRAWBERRY LANE, ORRVILLE, OH, 44667

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,233,903

Exercised Options: $18,233,903

Current Obligation: $18,233,903

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HDEC0107G3563

IDV Type: IDC

Timeline